Future Banking speaks to Nordnet’s chief innovation manager Jan Dinkelspiel about taking the plunge when it comes to technology and how banking bravery is needed to meet the demands of the modern customer.
"There are many challenges facing banks today," explains Jan Dinkelspiel, chief innovation officer at Nordnet. "I was speaking to a colleague earlier today in fact and trying to explain how we were different; how we are using UX [user experience] in everything we do because we are a digital bank. He was surprised and said how interesting it was that a bank should be focusing on UX."
Keep banking simple
Nordnet was founded 15 years ago when the internet moved towards the mass market. Since then, it has grown to become one of the top digital banks in the Nordic countries.
"Although we are all saying the exact same thing, in terms of enhancing the digital customer experience, there is a big difference between saying and doing," Dinkelspiel says. "I think the banking industry is far behind the other industries in terms of digital potential, which is a huge gap in the market for us. What we need to do with banking is to make things simple - that's the main intention for Nordnet, to make investment, savings and all those things simple."
Today, transactional banking is the norm online - transferring money, paying bills and checking balances is all done on the internet in the majority of cases. As branches have moved away from this sort of transactional service to focus more on relationship banking, the physical channel has been transformed from a revenue stream into a customer service.
"I think that just reflects the failure of taking the relationship banking into the digital customer experience," says Dinkelspiel. "Some banks still have branches because they feel they should, but what I want to do at Nordnet is take the relationship management out of the branches and put it into the digital arena."
It's an interesting concept: the reason that there are still several hundred thousand branches across Europe is not because it is a strong, current form of communicating with the customer, but because the technology isn't there yet to take everything that the branch does and put it online or on mobile.
"At some point, our generation is going to want to use the internet for transaction banking and for relationship banking, so it's going to be tough having a branch strategy," Dinkelspiel explains.
"With new technologies rising, everything starts to be more about the context, more about knowing your customer, but in such a way that the bank can hold on to its integrity. I think we're starting to get to a place where the bank knows more about us then we think. The future is to look at data in order to stay relevant.
"Today, banking is still about the customer coming into the branch. We need to be wherever the customer is, whether it's on social media or mobile, because the time has gone when we can be the rich banker sitting waiting for the customers to arrive with hat in hand asking for a service."
For Nordnet, achieving this goal is all about consolidation. The bank currently has 15 user interfaces and what it is trying to do is simplify systems.
"Initially, we had one for the active trader, one for the simple saver, one for mobile, one for the iPhone and so on," Dinkelspiel says. "The first step is to put everything under the same umbrella. The next step is to bring in seamless integration between the online and offline channels, creating a truly omnichannel experience.
"Nordnet prides itself on being the first bank to do a number of things. If you want to be not just a digital bank but a fantastic digital bank, I think you need to be extremely brave. You need to challenge the old ways of doing banking.
"To give you an example, we just bought a 'funny money' platform here in Sweden, called ShareVille. Currently there are just under 10,000 users all trading with [digital] funny money. What we're doing at the moment is bringing our customers onto this platform. In January 2014, they will have the ability to join this in one click. It's brave of the CEO at Nordnet to buy the platform. If you want to change the world, and in the banking industry there are a lot of things we can change, then you need to be extremely brave."